Oligodendrocytes and their connected myelin sheathes are extensively damaged in CNS inflammatory demyelinating lesions in multiple sclerosis (MS). Targeting of oligodendrocytes and myelin in MS is thought to be initiated by either autoimmunity to myelin antigens and/or to inflammatory immune responses to viruses that specifically infect oligodendrocytes. Irrespective of the mode of initiation, common features of white matter damage are oxidative stress of the oligodendrocytes and oxidation of myelin lipids and proteins. The source of oxidative changes in MS white matter is typically assigned to production of reactive oxygen species (ROS) by inflammatory macrophages, microglia, and astrocytes within or near to inflammatory demyelinating lesions. However, we have evidence that major cells responsible for ROS production are oligodendrocytes. Further, we have identified that the protein tyrosine phosphatase SHP-1 is a critical regulator of ROS production in oligodendrocytes and oxidative damage to myelin. As such, we believe that SHP-1 is a key factor in susceptibility to demyelinating disease by pathways that commonly involve ROS generation in the active phase of disease when inflammatory lesions are produced. The latter proposition stems from our related observations of increased susceptibility to demyelinating disease in SHP-1-deficient mice and SHP-1- deficiency in oligodendrocytes in MS brain (Gruber et al, 2011, submitted). The present project is focused on elucidating the mechanisms of ROS production in oligodendrocytes exposed to proinflammatory cytokines that exist in MS lesions and how SHP-1 controls production of ROS in these cells. To do this, we propose 3 specific aims. The first is to determine how SHP-1 regulates constitutive and TNF--inducible ROS production in oligodendrocytes. These studies will identify the sources of superoxide production in oligodendrocytes including ROS-producing complexes localized within early endosomes and mitochondria that are controlled by SHP-1. The second aim is to determine the consequences of increased ROS production in SHP-1-deficient oligodendrocytes. Analysis of lipid peroxidation, protein oxidation, and oxidation of anti-inflammatory PTP in SHP-1-deficient and wild type oligodendrocytes and myelin will be performed using both in vivo and in vitro approaches. Finally, the third specific aim involves a novel approach to ascertain the function of SHP-1 in vivo using targeted conditional deletion of the SHP-1 gene in either mature oligodendrocytes or in macrophages/microglia. These studies will be critical to defining the autonomous activity of SHP-1 in controlling ROS production in oligodendrocytes and resulting demyelinating processes in vivo.